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A technology once thought to be only in the domain of leading large enterprises is now helping small to midsize businesses fill resource gaps, innovate and grow.
In the past five years, the use of artificial intelligence (AI) has more than doubled — the benefit being that the technology is no longer exclusively accessible to large enterprises but to businesses of all sizes. About 40% of small businesses now actively use AI to facilitate operations, and demand for AI in small to midsize businesses (SMBs) is expected to continue growing.
As an SMB, you might have been reluctant to adopt artificial intelligence for your small business until now, with concerns about the cost and implications for employees. Fortunately, AI’s growth means that it is becoming increasingly embedded in everyday software and tools, making it easier to integrate it within core business processes. Additionally, AI can replace redundant, repetitive, unsafe tasks, or those that can’t physically be done at scale by humans. Combined, these factors are delivering a significant return on investment (ROI), enabling small and large businesses alike to use resources more efficiently and redirect staff to more creative and meaningful roles.
Beyond these benefits, AI is helping small businesses scale and compete against bigger companies, improve customer satisfaction and retain employees. According to a 2022 Deloitte survey, 82% of employees believe that AI would enhance job performance and satisfaction.
Smaller businesses generally have fewer resources than larger companies and, as a result, stand to benefit from AI. This article covers five different AI business trends that are changing SMBs — but first, what exactly is artificial intelligence?
Before diving into the trends, it helps to define what AI means. “Artificial intelligence” is a general term that describes the use of computer software that is developed to exhibit humanlike behaviors such as problem-solving, creating, planning and learning. There are several different approaches under the umbrella of AI. Some of the most common methods include:
Interpreting data at scale is at the core of AI’s value for small businesses. Here are some of the many ways small businesses are using AI to evolve.
1. Customer management, sales and marketing
You might already use a customer relationship management (CRM) system to plan and track marketing, sales and customer interactions. Leading solutions use artificial intelligence to automate some of these processes while making insights more accessible. For example, NLP and machine learning models — including generative AI — can help your business:
Some CRM solutions offering these capabilities include Salesforce’s Einstein GPT and Hubspot’s ChatSpot.
COVID-19 forced businesses to adapt many business processes, and cybersecurity is no exception. Cyber risks continue to increase globally year after year, with attack volumes up 7% in the first quarter of 2023 compared to the same period in 2022.
However, small businesses are behind when it comes to cyber defense: 1 in 3 SMBs use free cybersecurity software and 1 in 5 fail to use any endpoint security. It’s no surprise then that small businesses are three times more likely to be targeted than larger enterprises that have the resources to invest heavily in protecting digital assets against ransomware, phishing, malware, data theft, social engineering and insider risks.
Cybersecurity tools process a constant stream of data, generating high volumes of alerts — many of which are false positives. Even if you have robust security software, your SMB may lack the human resources needed to keep up with data analysis and triage. Artificial intelligence makes this task more manageable by identifying, analyzing and triaging potential threats early. For example, machine learning and deep learning models can spot anomalies in customer behaviors and uncover patterns in internal systems data that indicate a vulnerability. Some solutions may even remediate the problem or suggest fixes.
3. Supply chain management
The pandemic, geopolitical conflict and environmental disruptions are prompting businesses to rethink supply chain resilience. Artificial intelligence for business enables smaller companies to improve supply chain visibility for more strategic, agile decision-making. Data from your enterprise resource planning (ERP) software, Internet of Things (IoT or smart) devices and suppliers’ activities can all be leveraged. For example, your supply chain department can use AI to:
4. Software development
For some businesses, off-the-shelf software is insufficient for managing data. Depending on your business’s requirements, you may need to develop proprietary applications to handle data and manage other business processes more efficiently. However, software development is costly, and many SMBs lack the budget or expertise to develop bespoke functionality.
Enter Software 2.0, an approach that uses artificial intelligence to make software development easier for different user levels. If your business has limited (or zero) development talent, no-code software allows users to develop and customize applications without needing to write a single line of code. Low-code software works similarly, catering to employees with basic coding experience.
5. Finance and accounting
Your business most likely performs repetitive financial tasks, such as bookkeeping, managing accounts receivable and reporting. Fintech companies are developing a variety of AI-based tools that automate some of these basic accounting tasks, making your accounting team more efficient and reducing errors. Artificial intelligence also supports more complex financial processes, such as identifying fraudulent activities, generating reports and assessing creditworthiness. Domo is one example of a tool that can forecast your metrics and integrate businesswide data for financial planning.
If your company needs to optimize working capital and strengthen cash flow, artificial intelligence for business can support that, too. For example, many businesses and their suppliers are adopting dynamic discounting — an innovative working capital solution that uses AI technologies to facilitate early invoice payments in exchange for a buyer discount.
Some fintech providers in this niche use machine learning to evaluate which early payment opportunities give optimal returns based on market activities. This allows businesses to use invoice discounts strategically — that is, when they are more likely to be approved and when they are competitive against alternatives such as supply chain financing and business loans. Partnerships between early payment program providers and AI fintech, for example, C2FO and Vic.ai, are modernizing the invoice discounting model to make funding more accessible and inclusive to businesses of all sizes.
Advancements in artificial intelligence are making techniques such as machine learning more accessible to SMBs in terms of cost and ease of implementation. These solutions can assist in almost any business function that uses or generates data, from sales and marketing to working capital optimization. If your business has the funds to invest in growth, consider AI as a way to improve efficiency, boost customer satisfaction and strengthen employee retention.
Learn more about innovative business solutions such as dynamic discounting and early payment programs.
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